NTP2018: A new hope for telecom sector

As technology evolves, the policy environment must also keep pace with it so that all citizens get secure access in an ever changing environment. This is key to a sustained, rapid socio-economic growth of the country. Towards this goal, the Government has been regularly announcing telecom policies. Thus far we have seen four such policies – National Telecom Policy 1994 (NTP94), National Telecom Policy 1999 (NTP99), Broadband Policy 2004 and NTP2012. Now it’s time for the next phase of communications services in India - NTP2018. Each NTP document has left a lasting impression and can be considered the reason behind the phenomenal success of the telecom sector in the country over the last two decades.

The latest NTP 2018 is yet another opportunity for the government to bring in the much needed fundamental change required by the Indian Telecom sector for it to recast. The new policy must encourage investments and ensure financial stability of the sector. Several current levies & taxes need to be rationalised and multiple audits must be done away with, if we want India to leapfrog into the next level of socio-economic growth and improve our ease of doing business rankings.

At this time, the industry is in a downward spiral. Cumulative debts amounting to around INR 4.6 lakh crore on revenues of under INR 1.8 lakh crore are forcing the industry to question the long-term prospects and viability of the sector. The industry has suggested a number of options to the telecom regulator when it was conducting the consultation process, including reduction of Spectrum Usage Charge to a uniform 1% (of AGR) and create a Telecom Finance Corporation as a vehicle to mobilize and channelize financing. Other submissions included the USO fund contribution be rationalised to 3% and ultimately be done away within 2-3 years.

In terms of operational changes, the sector has been seeking resolution for a number of issues, including a single unified licence across the country where every service provider offering the same service must adhere to the same rules. Similarly, there is a need to put a Spectrum Management policy in place so that the major points of conflict are dealt with conclusively. Moreover, the service providers should be allowed access to satellite spectrum for any application, i.e. V-SAT, Direct to Home (DTH), Teleport or any other form of telecom services.

Other recommendations circles around ease of doing business, data privacy, network security, manufacturing and skill development – prerequisites for an investor friendly environment. The government is targeting the end of the fiscal year to finalise the new NTP. The Hon. Minister has conveyed his cognisance of these issues at various public and industry platforms for which the industry is truly grateful.

TRAI has released detailed suggestions for NTP-2018, with many of industry’s recommendations included. We are happy that the regulator has considered most of the suggestions and has further come out with objectives, along with specific timelines to achieve the same. TRAI’s recommended simplifying the licensing and regulatory frameworks and rationalizing taxes, levies and related compliance by 2019. We agree with this simplification as it includes reduction in the multiple audits – this will save both cost and time of the operators.

The NTP2018 is heading towards creating ICT policy, focussing on getting investment for building networks and creating infrastructure. TRAI has even gone ahead and suggested the latest policy document to be named as an ICT Policy-2018.

NTP 2018 also needs to take into account future technologies such as 5G. 5G network is envisaged to accommodate Applications and Services with different latency, reliability and bandwidth. This would require effective sharing of network resources and network management techniques. Technologies like Software Defined Network (SDN), Network Function Virtualization (NFV) would be implemented for effective sharing of the network to support the 5G use cases. Various network functions such as network slicing, Mobile Content Delivery Network as Service can be implemented through these technologies to support various 5G use cases. The Government needs to come out with a policy to see that these technological initiatives and innovations are facilitated and are not hampered by any archaic Policy statement, or intrusive irrelevant solutions.

TRAI has also come out with several strategies to achieve certain targets for leapfrogging India into the Top-50 nations in International rankings in Ease of Doing Business in the ICT sector. Investments of over INR 2-3 lakh crores over the next two years would be required for a fully connected and an empowered Digital India.

The industry has called for a stable investment friendly policy environment where telecom operators can be sustainable enough to invest cash into their business and work together with the Government to connect over 1 billion people to the internet. As per reports a 10 per cent increase in broadband penetration leads to a 1.4% growth in GDP. The time is truly ripe for a bold former PR Vajpayee like reforms through this NTP.

Though the Government has reduced GST rates and has made IMG’s recommendations, to bring about systematic changes, but not much has been done yet, while the industry continues to ask for relief.

The need is to create a stable, predictable, innovation & investment, friendly regulatory and policy environment. We hope that the government will extend urgent relief, by addressing the industry’s recommendation, in the upcoming NTP 2018.

DISCLAIMER: The views expressed are solely of the author and ETTelecom.com does not necessarily subscribe to it. ETTelecom.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.

Rajan Mathews presently serves as the Director General of COAI. Prior to joining COAI as DG in April 2010, Rajan served in many senior executive positions such as CEO, COO and CFO of such major companies as Telargo (a JV of NTT DoCoMo), Afghan Wireless, Call Sciences, AT&T Wireless among others

Rajan Mathews presently serves as the Director General of COAI. Prior to joining COAI as DG in April 2010, Rajan served in many senior executive positions such as CEO, COO and CFO Show more.. of such major companies as Telargo (a JV of NTT DoCoMo), Afghan Wireless, Call Sciences, AT&T Wireless among others